Blue Chip ANH in Value Territory

AB InBev (ANH:JSE) is bottoming out above R1,000 per share after making its high a little over R2,000 in Feb 2016. Looking at the European listing, the share has only been this oversold twice before and both times a massive rally followed. 

The downward spiral is as a result of increasing debt, emerging markets falling out of favour, the Rand strengthening and the market pricing in a dividend cut in the full-year results to December. 

ANH’s emerging market exposure will provide it with superior growth over the long-term it should be able to cut its debt by over 50% in the next five years. 

For the first time since listing on the JSE, AB InBev has been added to several indices (All Share, Large Cap, Large and Mid-Cap, Industrial 25, Value, Growth, Shareholder weighted Al Share, Shareholder weighted Industrial 25). Index tracking funds will be buyers as new inflows come. 

Buy AB InBev below R1,100 for a move to R1,500 over the coming months 

The week ahead: 

  • Local Data: Consumer Price Index (23/01) 
  • Results Due: ADI (25/10) 
  • LDT (22/01): CLS, LEW, NTC, NEWFSA, GIVFIN, GIVIND, GIVISA, STXPRO, STXQUA 
  • Special/Share Premium Dividend: NTC, STX40, STXDIV, STXFIN, STXIND, STXMMT, STXSWX 

 

Other Economic data releases of interest…  

  • Tuesday: CB Consumer Confidence (USA) 
  • Wednesday: CPI (AUS); Advance GDP, Core Durable Goods, Core Retail Sales, Federal Funds Rate (USA) 
  • Thursday: GDP (CAN) 
  • Friday: Average Hourly Earnings, Unemployment rate, Non-Farm Employment Change (USA); Unemployment Rate (CAN) 

Short Term Ideas 

  • Sasol: Buy below R430, target R460.00 (Longer term profit target in update below) 
  • Goldfields: Closed at target of R45.25 for 28.37% gain. 

Long Term Ideas 

  • Sasol: Long term buy below R430. Target R550. 
  • AB InBev: Buy below R1,100 with a target of R1,500 
  • Richemont: Buy dips below R95. Target R130.00. 
  • Remgro: A break above R210 is needed to open up R230. Buy below R200.00 
  • Coronation: Sentiment still negative. Buy dips below R50.00 for a move back to R80 
  • Shoprite: Stuck in Trading range below R200. Hold. 
  • Aspen: Bottoming out. Add below R150.00, keep exposure appropriate. 
  • Sygnia: Moving in the right direction. Add below R8. 
  • MTN: Accumulate on dips below R80.  
  • Glencore: Buy below R52.50 
  • Naspers: Break out imminent, buy below R3,000. Target R3,800 

Investors looking to take advantage of the stronger Rand and gain offshore exposure with limited downside should contact us as new product launches close soon. Email invest@protrade.co.za 

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